Foreclosure in Florida
Florida has consistently been a state with one of the highest foreclosure rates in the country. Many people who end up being foreclosed on run into that situation because they don’t understand the foreclosure process and don’t understand their options that could help them to potentially avoid foreclosure. If you find yourself in a situation where you may be foreclosed on, knowing the process of foreclosure can help.
Signing the Promissory Note
When you take a loan out to purchase a home, you will have to sign two documents, a promissory note and a mortgage. The promissory note is a document that essentially is a promise that you will pay off the loan as described within the note. This note will describe exactly how the loan is to be paid back as well as other aspects of the loan such as late fees.
Missing a Payment
If you happen to miss a payment, that does not mean that you will be foreclosed on. Under the terms of most loans, you will probably have a grace period to make the payment which will last around 10 to 15 days. If after the grace period the payment still has yet to be paid, a late fee will be assessed by the loan servicer. This late fee is typically around five percent of the payment that is overdue. The exact terms of any late fees should be specified in the promissory note that was signed along with the mortgage. The specifics of any late fees will also likely be spelled out in the monthly mortgage statement.
Missing Multiple Payments
If you have missed multiple payments, that does not necessarily mean that you will be foreclosed on. In most cases, the lender will inform you via letter a couple of times that you need to catch up on your payments. You may also get a phone call with this information. These are often not warnings and should not scare you regarding your loan. In fact, these are potentially great opportunities to get caught up on your payments. Rather than ignoring these notices and hoping they go away, you can discuss the situation with the lender and see if there are any adjustments to be made that will benefit both parties to avoid foreclosure. Some of these options could include a loan modification, forbearance, or a payment plan.
Florida Foreclosure Procedure
The state of Florida is a judicial foreclosure state which means that a lawsuit must be filed in a state court to go through the foreclosure process. The process begins with the lender filing a complaint with the court claiming that the borrower has delinquent payments. The complaint will be delivered in the form of a summons to the borrower giving them 20 days to provide an answer to the letter. If the borrower decides not to respond to the letter, the result is a default judgement, meaning that the lender automatically wins.
If the borrower does respond to the letter, there are options as to how the lender can respond. One way for the lender to respond is to file a motion for there to be a summary judgement. This means that the judge would rule in favor of the lender if the important facts of the case cannot be disputed by the borrower. In the event that a summary judgement is denied by the court, the case would then go to foreclosure trial.
Florida’s Expedited Process
In the state of Florida, there is an expedited foreclosure process that can be conducted. This process can be brought forth if the case has been uncontested by the borrower or when the homeowner doesn’t have a genuine defense.
The process starts with the lienholder requesting an order that shows that the foreclosure should not proceed. The courts will immediately review the request and either grant it or deny it. If the process moves forward, court dates are set for the hearing. The date is usually set at 20 days after the defendant is served with the order to show cause. The borrower will have the opportunity to file a response prior to the hearing which is their opportunity to raise any issues dealing with the foreclosure.
During the hearing, the court will hear the arguments of the borrower and if they raise any legitimate defense to the foreclosure, the court will not enter a final foreclosure judgement at that time. However, if the defendant waives their right to be heard or lose at the hearing, the court has the right to enter a final judgement of foreclosure and can order the clerk of the court to carry out a foreclosure sale.
The foreclosure of a home can be a very tumultuous time for a homeowner. Understanding the process when entering a potential foreclosure is an important step to protecting yourself of such an event. If you are in the process of being foreclosed on, come to Yardley Law and allow us to help you defend yourself and your home.